A man stands next to a logo of the Reserve Bank of India (RBI) in Mumbai.
| Photo Credit: Reuters

India’s current account deficit (CAD) widened marginally to $ 9.7 billion (1.1% of GDP) in Q1:2024-25 from $8.9 billion (1.0% of GDP) in Q1:2023-24 and against a surplus of $4.6 billion (0.5% of GDP) in Q4:2023-24, according to dada released by the Reserve Bank of India (RBI) on Monday (September 30, 2024).

The current account surplus for Q4:2023-24 was revised downwards to $4.6 billion from US$ 5.7 billion earlier due to an upward adjustment of customs data on merchandise imports, the RBI said.

“The widening of CAD on a year-on-year (y-o-y) basis was primarily due to a rise in merchandise trade deficit to $ 65.1 billion in Q1:2024-25 from $56.7 billion in Q1:2023-24,” the RBI said.

Net services receipts increased on a y-o-y basis to $39.7 billion in Q1:2024-25 from $ 35.1 billion a year ago. Services exports have risen on a y-o-y basis across major categories such as computer services, business services, travel services and transportation services.

Private transfer receipts, mainly representing remittances by Indians employed overseas, increased to $29.5 billion in Q1:2024-25 from $ 27.1 billion in Q1:2023-24, as per RBI data.

Net outgo on the primary income account, primarily reflecting payments of investment income, increased to $10.7 billion in Q1:2024-25 from $10.2 billion in Q1:2023-24.

In the financial account, net foreign direct investment inflows increased to $6.3 billion in Q1:2024-25 from $ 4.7 billion in the corresponding period of 2023-24.

Net inflows under foreign portfolio investment moderated to $0.9 billion from $ 15.7 billion in Q1:2023-24 and net inflows under external commercial borrowings (ECBs) to India amounted to $1.8 billion in Q1:2024-25, lower than $5.6 billion in the corresponding period a year ago.

Non-resident deposits (NRI deposits) recorded net inflows of $ 4.0 billion, higher than $ 2.2 billion a year ago.

There was an accretion of $5.2 billion to the foreign exchange reserves (on a BoP basis) in Q1:2024-25 as compared with $24.4 billion in Q1:2023-24, the RBI said.